The gold (XAU/USD) has validated yesterday the breakouts of 1740 and 1760 points, giving new buy signals. The price just reach the next resistance at 1780 points. We continue to advise long positions as far as 1740 points is support. The breakout of 1780 points will give a new buy signal and allow the price to pursuit its bullish rally towards the resistance at 1800 points.

Market sentiment was lifted as the Fed announced purchases of agency mortgage-backed securities, starting tomorrow at a total of US$23B through the end of the month and then at a rate of US$40B per month for an open-ended period. The Fed also decided to extend operation twist through the year end and pledged to leave interest rates at exceptionally low level until mid-2015. Financial markets rallied with the DJIA and the S&P 500 indices gaining +1.55% and +1.63% respectively. In the commodity se...

Silver, which has been rising sharply on the back of expectations of the Fed moving to implement QE3, fell sharply a day before the FOMC meeting, which will be on Thursday (9/13), 2:00PM EDT (18:00GMT). As seen in the 1H chart, silver has completed a double top and fell to the 200-hour SMA before finding some support around 32.45.

Gold is nearing the objective defined from its breakout in late August. To review, "The alternate gold count was confirmed today with the trade above 1640.80. Using the triangle measuring technique...objectives for gold are 1703.56 and 1754.26." The former was reached and exceeded but the latter level is in line with the 1760 area, which served as a pivot in December 2011 and February 2012. Expect a reaction above 1750.

The price of silver reached a 5-month high this past week as investor interest seems to have been rekindled in both gold and silver as belief in financial markets increases that the latest round of monetary easing from the Federal Reserve - QE3 - will soon be on its way. Many investors had largely stayed away from silver in recent months after some had got caught up in its volatility. Silver had touched a 30-year high in April 2011 before plunging 35 percent in a few short weeks.

Gold broke higher on Friday and once we broke the 1714 barrier up we came breaking all levels of resistance until 1741 just in front of our 1742 resistance...Now we have a trendline on Gold 1762 and also a fib level at 1774...so if we can stay trading above 1730 we may be able to see these highs before the overbought indicators kick in.

Gold has not been able to break 1697 and this has actually been the high. Now we are overbought, and the chart pattern evident is an upward waving flag....again a bearish patter...So we look today for the market to fall back and we should be able to reach 1686 without too much trouble..

After consolidating for most of last week (8/27-8/31) in a flag pattern, silver surged after Bernanke's speech at Jackson hole gave the market more expectation of QE. The 1H chart shows silver popping above the flag pattern after the risk event. The 1H chart above shows the breakout swing stalling as we begin the new week (9/2 in the US, but 9/3 in the Asian session as the global session started during morning in Asia).